Affiliate marketing is a powerful way to expand your brand’s reach and to build trust with a whole new set of consumers. But knowing when the time is right to launch an affiliate program is just as important as landing the right partners.
A great affiliate marketing program is built gradually, and on a strong existing foundation. To make the most of the significant effort involved, and to forge effective and lasting affiliate relationships, it’s important to take time to consider if an affiliate program is right for your brand, and to employ a proven approach from day one.
IS YOUR BRAND READY FOR AFFILIATE?
There are a few key questions to ask yourself to determine whether you’re in a good position to launch an effective program.
1. Have you reached product-market fit?
Getting the word out via paid and affiliate marketing is important, but it isn’t everything. To be in a good position to benefit from affiliate, you should have a product that is proven to satisfy a strong market demand. Before launching an affiliate program, you should be seeing strong growth in customer engagement and retention. That way, affiliate partners can use the trust they’ve built with consumers to drive more interest in your product – and they’ll know that your product will deliver on its promise.
Please note that we are looking for health metrics and overall growth health and need to take each case very specifically. Brian Balfour outlines how to think about benchmarks here as we need to get specific and take them with a grain of salt.
2. Have you already built up some steam, revenue-wise?
Affiliate partners are depending on you to be ready to meet the increased demand that they’ll drive your way. You have to have adequate cash flow to ramp up order processing and fulfillment (if you have a physical product). Having enough available capital to seamlessly ramp up an increase in conversions also means being able to field a significant increase in customer service requests. Make sure you have adequate revenue or VC funding in place before launching an affiliate program.
3. Have you built a strong conversion and retention foundation?
The best affiliate partners want to see the potential for significant, scalable and sustainable growth. They’ve invested their reputation in your brand, so they also want to see bottom-line results. Some indicators they look for are: a healthy average order size, good conversion and customer retention rates, a strong average product price and a solid supply chain with competitive shipping rates.
If you’re still working to make these numbers competitive with other brands in your vertical then it can help to compensate affiliates with a more generous payout, high-quality content, greater willingness to test landing pages, or a flat fee to enable testing. Deals – whether exclusive, semi-exclusive or channel-wide – can also help strengthen your relationship with affiliate partners.
4. Have you established a paid marketing growth loop?
Strength in other areas, like content marketing or viral channels doesn’t always translate to success in affiliate, which is itself a subset of paid marketing. Whether your focus on paid marketing has led to sustained growth or whether a well-rounded growth strategy that includes content marketing, viral, and paid has begun to pay dividends, to succeed in affiliate, you’ll need proof that paid marketing is growing your brand.
The most successful brands establish themselves through paid marketing before teaming up in the affiliate space. A typical entry point to affiliate marketing for brands occurs when they begin to see diminishing returns from paid marketing and need to further diversify their acquisition efforts.
LAUNCHING AN AFFILIATE PROGRAM ON THE RIGHT FOOT
If you decide that an affiliate marketing program is right for you, starting off on the right foot is crucial. With publisher and consumer trust being such an important part of the equation, you need to be prepared for what lies ahead. Here are some important first steps toward ensuring the success of your affiliate program.
Think long-term: Affiliate marketing is a long game, so it pays to be patient. If it took 2-4 months to build an audience, test and hone creative, and adjust your paid marketing approach accordingly, you should expect to invest double that time to build and sharpen your approach to affiliate. It may take 4-to-8 months to figure out if this channel is viable for your brand. It’s likely that the better and more sustainable the returns you’ll see, the more time you invested in identifying and landing the right publishers, and putting the pieces in place to generate and make the most of data.
Have content at the ready: First impressions are everything. When affiliate partners put your brand in front of their users, you should have quality content ready. Your affiliate network tracking platform should be stocked with IAB-standard ad units, banners, video content and a promotional calendar for planning purposes. You might also consider creating tools and widgets that can properly demonstrate to consumers what your brand can do. It’s also helpful to create offers, whether exclusive or otherwise, that partners can promote to their customers to show you value them.
Prioritize planning and transparency: Affiliate partners can help drive better results if they know what’s coming down the pike and when. Once you have the right affiliates in place, communicate with them early and often so they know about upcoming product updates, events, holiday specials or deals. Sharing new customer insights and new content or tools puts partners in the best position to help you grow. On the other hand, it’s key to build an affiliate network that can handle tracking and payouts, and flag non-compliant or fraudulent affiliates so you’ve got the best partnerships in place.
Strengthen your approach through testing: All messaging is not created equal. As you build a following and a relationship with that following, you have to be responsive to its wants and needs. Be ready to test your creative and your messaging. Don’t just take the conventional wisdom on affiliate marketing as gospel, test to see what approaches help build lasting and sustainable relationships with partners and customers. Stay open-minded when it comes to metrics as well. Though much analysis of affiliate success is based around CPA, the best programs also look to CPM and CPC as important factors in engagement and growth.
Trust your affiliates: Be prepared to give up a certain degree of control to publishers. Though you should provide guidelines for the partners you choose for your affiliate program, it’s also important to give them some leeway to do what they do best – motivate their audience. Trust their ability to connect with their audience in an authentic way and in the end, everyone will benefit – advertiser, affiliate, and most importantly, the customer. You have to balance the desire to protect your brand with the opportunity to truly connect long-term with affiliates that share your values and send consumers your way.
Set aside money for publishers: To compete with other brands for top-performing publishers, you need to pay them promptly and reliably when they deliver results. Reserve plenty of funds for publisher payouts, including extra capital for top-performing publishers.
Set up relationships to be lasting, not transactional: Publishers are your partners. If you treat them like interchangeable puzzle pieces, it’s unlikely you’ll connect with them – and in turn, with their audience. Make sure to thoroughly and transparently communicate the goals of your affiliate program and where the publisher fits in.
HOW TO GET STARTED CHANNEL-BUILDING TODAY
Affiliate has built a lasting reputation as an effective marketing channel – a far cry from the early days of coupon and deal sites. For some e-commerce brands, it can bring in up to 15% of their business and deliver as much as 10:1 return on ad spend.
RBL helps support brands who are ready to launch affiliate marketing programs by defining a competitive affiliate program structure; developing guidelines for publisher partners; laying out an extensive array of content and special offers; and providing tracking technology, platform options and more based on your brand’s unique business goals. We put into action expertise we’ve earned working with clients across many industries to help you see positive results right out of the gate.
Find out how RBL can help you build a successful affiliate program today.